The 2019 global gold production is set to set a record of 109.6 million ounces, an increase of 2.3 Million ounces from 2018 production according to a global research group S&P Global. There has been more than a decade of consistent growth in the gold industry with investor confidence seeing massive takeovers in mergers and acquisitions in the last 2 years.
Significant numbers in green field projects have been seen with a lot of brownfield projects previously on care and maintenance being revamped for full scale production. In Australia which accounts for more than 17% of the world gold production, Gold accounted for close to 50% (about $689 Million) of all the Australian mining exploration spend greenfield projects. The Price forecast has been put at an average of USD1,300/oz in 2019 and USD1,350/oz in 2020 (Fitch Solutions).
The European Central Banks sold 7,853 tonnes of gold between 1987 and 2009; between 2010 and 2016 they bought 3,297 tonne and are expected to buy more into the future. The annual volume of gold bought by investors has increased by at least 235% over the last three decades. Mine production accounts for the largest part of gold supply – typically, 75% each year with the rest being from other sources which include.
The major issue is on the rate of discovery as the current depletion will outpace reserves replenishment and by as early as 2021, there could be a drop in Gold production ( 3 million ounces by 2023 according to S&P Global) , especially as most operations go deeper where a lot of safety, stability, ventilation operating costs challenges exists.
The challenge is expected to be exacerbated by drops in grades currently being experienced by most mines mining on upper surface. Changes in mining technology will need to adapt faster to address these challenges and the past 5 years have just seen mining starting to take the right steps in the correct direction of technology adoption. It remains to be seen, since sustainability is our prime focus, how the future will fare for the Gold Industry.